SAN DIEGO, April 28, 2008 (PRIME NEWSWIRE) -- In a release issued earlier today by Entropic Communications, Inc.(Nasdaq:ENTR), under the same headline, note that the financial tables were not included. The updated release follows:
Entropic Communications, Inc. (Nasdaq:ENTR), a leading provider of silicon solutions to enable connected home entertainment, today reported its first quarter results for the period ended March 31, 2008. Entropic reported first quarter net revenues of $42.0 million, an increase of 4.5% compared with $40.2 million in the fourth quarter of 2007 and 110% higher than in the first quarter of 2007. The revenues in the first quarter of 2008 included revenues related to the acquisition of RF Magic, compared with the first quarter of 2007 which was prior to the acquisition.
In accordance with U.S. generally accepted accounting principles (GAAP), the company's first quarter net loss was $3.9 million, or ($0.06) per share (basic and diluted) on 66.7 million weighted average shares outstanding. This compares with GAAP net loss of $0.5 million, or ($0.02) per share (basic and diluted) on 27.5 million weighted average shares outstanding, in the fourth quarter of 2007. Non-GAAP net income in the first quarter was $3.2 million, or $0.04 per diluted share on 73.6 million shares outstanding, compared to net income of $3.2 million, or $0.05 per diluted share on 68.1 million average shares outstanding, in the fourth quarter of 2007. The increase in GAAP and non-GAAP weighted average shares outstanding between the two periods is attributable to the company's initial public offering which occurred late in the fourth quarter of 2007.
"Our home networking business continues to strengthen and we saw further diversification within the DBS Outdoor Unit business as our Channel Stacking Switch products continued to ramp," noted Patrick Henry, Chairman and Chief Executive Officer of Entropic Communications. "We reported our sixteenth consecutive quarter of revenue growth and our third consecutive quarter of non-GAAP net income. We are off to a fabulous start to the year and see increasing momentum in our served markets."
Three months ended
----------------------------------
(In millions, except Mar. 31, Dec. 31, Mar. 31,
per share data) 2008 2007 2007
Net revenues $42.0 $40.2 $20.0
GAAP net loss ($3.9) ($0.5) ($1.1)
GAAP net loss per share (basic
and diluted) ($0.06) ($0.02) ($0.21)
Non-GAAP net income (loss)(1) $3.2 $3.2 ($0.7)
Non-GAAP net income (loss)
per share(1) $0.04 $0.05 ($0.02)
1. Please refer to the financial statements portion of this press
release for an explanation of the non-GAAP financial measures
contained in the table above and a reconciliation of such
measures to the comparable GAAP financial measures.
First Quarter Highlights
* Partnered with Actioncable to deliver cost-effective multimedia services over the existing cable infrastructure for China MSO deployments in the SiChuan Province * Announced that Earda Electronics will use Entropic's RF4800 single chip silicon tuners to deliver Digital Video Broadcast over Cable (DVB-C) Tuner Modules * Expanded our partnership with Browan to deliver enhanced broadband communication services to several additional cities in China using Entropic's c.LINK broadband access product solutions * Partnered with Jiuzhou Electronics to deliver next generation digital set-top boxes using Entropic's silicon tuners * Consolidated our San Diego facilities into new 90,000 square foot corporate headquarters
Other Recent News
* Expanded our product offering and technical talent with the April 3, 2008 acquisition of Vativ Technologies, a fabless semiconductor company that designs and markets HDMI compliant chips that are sold into consumer electronics equipment
For More Information
Entropic management will be holding a conference call today, April 28, 2008, at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time to discuss the company's results for the first quarter and to provide guidance for the second quarter. You may access the conference call via any of the following:
Teleconference: 719-325-4866 Conference ID: 2212423 Web Broadcast: http://ir.entropic.com/events.cfm Replay: 719-457-0820
About Entropic Communications
Entropic Communications, Inc. is a leading fabless semiconductor company that designs, develops and markets system solutions that enable connected home entertainment. The company's technologies significantly change the way high-definition television-quality video and other multimedia content such as movies, music, games and photos are brought into and delivered throughout the home. For more information please visit: www.entropic.com.
The Entropic Communications logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=4255
Forward Looking Statements
Statements in this press release that are not strictly historical in nature constitute "forward-looking statements." Such statements include, but are not limited to, statements regarding increasing momentum in our served markets, continued strengthening in our home networking business, expanded business activities and partnerships in China and the anticipated benefits of the Vativ Technologies acquisition. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Entropic's actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors include, but are not limited to, our dependence on a limited number of customers for a substantial portion of our revenues; the ability of our customers or the service providers who purchase their products to successfully compete and continue to grow in their markets; the continued development of the market for HD video and other multi-media content delivery and networking solutions based on the MoCA standard; the effects of competition; risks related to international operations including political and economic conditions in foreign markets; our ability to effectively integrate acquired businesses and realize the anticipated financial and strategic benefits from businesses we acquire; risks associated with adverse U.S. and international economic conditions; and other factors discussed in the "Risk Factors" section of Entropic's Annual Report on Form 10-K for the fiscal year ended December 31, 2007. All forward-looking statements are qualified in their entirety by this cautionary statement. Entropic is providing this information as of the date of this release and does not undertake any obligation to update any forward-looking statements contained in this release as a result of new information, future events or otherwise.
Entropic Communications(r) and the stylized Entropic "curve" logo are either trademarks or registered trademarks of Entropic Communications, Inc. in the United States and/or other countries.
ENTROPIC COMMUNICATIONS, INC.
GAAP Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
----------------------------------
March 31, Dec. 31, March 31,
2008 2007 2007
---------- ---------- ----------
(unaudited) (unaudited) (unaudited)
Net revenues $ 41,988 $ 40,168 $ 20,026
Cost of net revenues 22,837 21,705 14,531
---------- ---------- ----------
Gross profit 19,151 18,463 5,495
Operating expenses:
Research and development 13,313 12,423 4,190
Sales and marketing 4,144 3,706 1,500
General and administrative 3,523 3,625 767
Amortization of purchased
intangibles 596 1,296 --
Restructuring charges(1) 1,079 -- --
---------- ---------- ----------
Total operating expenses 22,655 21,050 6,457
---------- ---------- ----------
Loss from operations (3,504) (2,587) (962)
Other (expense) income, net (198) 2,101 (150)
---------- ---------- ----------
Loss before income taxes (3,702) (486) (1,112)
---------- ---------- ----------
Income tax expense 154 -- --
---------- ---------- ----------
Net loss before accretion of
redeemable convertible preferred
stock (3,856) (486) (1,112)
Accretion of redeemable convertible
preferred stock -- (23) (32)
---------- ---------- ----------
Net loss attributable to common
shareholders $ (3,856) $ (509) $ (1,144)
========== ========== ==========
Net loss per share attributable to
common shareholders (basic and
diluted) $ (0.06) $ (0.02) $ (0.21)
========== ========== ==========
Weighted average shares (basic and
diluted) 66,662 27,494 5,472
========== ========== ==========
(1) The restructuring charges are related to exiting the lease
agreement for the former headquarters in San Diego, California, as
well as charges for the impairment of property and equipment and other
long term assets.
ENTROPIC COMMUNICATIONS, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(In thousands, except per share amounts)
This press release contains the following non-GAAP financial measures:
non-GAAP net income (loss) and net income (loss) per share. The
presentation of such measures is not intended to be considered in
isolation or as a substitute for, or superior to, the financial
information prepared and presented in accordance with GAAP. Our
non-GAAP net income (loss) and net income (loss) per share exclude
stock-based compensation expense, inventory step-up costs,
amortization of developed technology and purchased intangible assets,
and in-process research and development charges.
The following table sets forth such non-GAAP measures for the
applicable periods as well as the reconciliation of such measures to
the directly comparable GAAP measures for the periods shown.
Three Months Ended
----------------------------------
March 31, Dec. 31, March 31,
2008 2007 2007
---------- ---------- ----------
GAAP net loss attributable to
common shareholders $ (3,856) $ (509) $ (1,144)
Non-GAAP adjustments:
Stock-based compensation:
Cost of net revenues 46 71 --
Research and development 1,758 1,215 53
Sales and marketing 623 489 65
General and administrative 1,197 918 22
---------- ---------- ----------
Total stock-based compensation 3,624 2,693 140
Acquisition-related items:
Amortization of inventory
step-up charges to cost of net
revenues -- 687 --
Amortization of purchased
intangible assets:
Cost of net revenues 1,240 1,240 --
Operating expenses 596 1,296 --
Restructuring charges 1,079 --
Write-off of debt issuance costs
upon early repayment of debt 476 --
Loss (gain) on fair value of
preferred stock warrant
liabilities -- (2,180) 272
---------- ---------- ----------
Total of non-GAAP adjustments 7,015 3,736 412
---------- ---------- ----------
Non-GAAP net income (loss) $ 3,159 $ 3,227 $ (732)
========== ========== ==========
GAAP weighted average shares
(basic and diluted) 66,662 27,494 5,472
Non-GAAP adjustment for dilutive
shares(a) 6,980 7,950 --
Non-GAAP adjustment for assumed
conversion of redeemable
convertible preferred stock(b) -- 32,697 31,855
---------- ---------- ----------
Non-GAAP weighted average shares
(diluted) 73,642 68,141 37,327
========== ========== ==========
GAAP net loss per share (basic and
diluted) $ (0.06) $ (0.02) $ (0.21)
Non-GAAP adjustments detailed
above(a)(b) 0.10 0.07 0.19
---------- ---------- ----------
Non-GAAP net income (loss) per
share (diluted) $ 0.04 $ 0.05 $ (0.02)
========== ========== ==========
(a) Shares included for calculating diluted earnings per share for
periods with non-GAAP net income. These shares exclude the dilutive
effects of the unrecognized share based compensation. For the periods
shown with a net loss, no shares were included for the diluted
earnings per share calculation, as including such shares would be
antidilutive.
(b) Non-GAAP adjustment to weighted average shares represents the
assumed conversion of redeemable convertible preferred stock into
common stock as of the later of their issuance or the beginning of
their respective periods for the periods presented.
ENTROPIC COMMUNICATIONS, INC.
Non-GAAP Supplemental Financial Information
(Unaudited; in thousands, except percentage data)
The following table sets forth certain non-GAAP financial measures
used in calculating Entropic's non-GAAP net income (loss) for the
periods presented. Such non-GAAP financial measures are based upon
Entropic's unaudited consolidated statements of operations for the
periods presented and give effect to certain adjustments identified
in the table. The presentation of such non-GAAP financial measures
is not intended to be considered in isolation or as a substitute for,
or superior to, the financial information prepared and presented in
accordance with GAAP. In addition, investors should not rely on the
results of prior periods as an indication of Entropic's future
performance
Three Months Ended
-------------------------------
March 31, Dec. 31, March 31,
2008 2007 2007
--------- --------- ---------
(unaudited)(unaudited)(unaudited)
NET REVENUES: $ 41,988 $ 40,168 $ 20,026
COST OF NET REVENUES:
GAAP cost of net revenues $ 22,837 $ 21,705 $ 14,531
Less:
Stock-based compensation expense 46 71 --
Amortization of developed technology 1,240 1,240 --
Amortization of inventory step-up -- 687 --
--------- --------- ---------
Non-GAAP cost of net revenues $ 21,551 $ 19,707 $ 14,531
========= ========= =========
GROSS PROFIT:
GAAP gross profit $ 19,151 $ 18,463 $ 5,495
Add:
Stock-based compensation expense 46 71 --
Amortization of developed technology 1,240 1,240 --
Amortization of inventory step-up -- 687 --
--------- --------- ---------
Non-GAAP gross profit $ 20,437 $ 20,461 $ 5,495
========= ========= =========
GAAP gross margin 45.6% 46.0% 27.4%
Non-GAAP gross margin 48.7% 50.9% 27.4%
OPERATING EXPENSES:
GAAP operating expenses $ 22,655 $ 21,050 $ 6,457
Less:
Stock-based compensation expense 3,578 2,622 140
Amortization of purchased intangibles 596 1,296 --
Restructuring charges 1,079 -- --
--------- --------- ---------
Non-GAAP operating expenses $ 17,402 $ 17,132 $ 6,317
========= ========= =========
OTHER INCOME (EXPENSE), NET:
GAAP other income (expense), net $ (198) $ 2,101 $ (150)
Add:
Loss (gain) on fair value of
preferred stock warrant liabilities -- (2,180) 272
Write-off of debt issuance costs
upon early repayment of debt 476 -- --
--------- --------- ---------
Non-GAAP other income (expense), net $ 278 $ (79) $ 122
========= ========= =========
INCOME TAX PROVISION: $ (154) $ -- $ --
ACCRETION OF REDEEMABLE
CONVERTIBLE PREFERRED STOCK: $ -- $ (23) $ (32)
RESEARCH AND DEVELOPMENT EXPENSE:
GAAP research and development $ 13,313 $ 12,423 $ 4,190
Less:stock-based compensation expense 1,758 1,215 53
--------- --------- ---------
Non-GAAP research and development $ 11,555 $ 11,208 $ 4,137
========= ========= =========
SALES AND MARKETING EXPENSE:
GAAP sales and marketing $ 4,144 $ 3,706 $ 1,500
Less:stock-based compensation expense 623 489 65
--------- --------- ---------
Non-GAAP sales and marketing $ 3,521 $ 3,217 $ 1,435
========= ========= =========
GENERAL AND ADMINISTRATIVE EXPENSE:
GAAP general and administrative $ 3,523 $ 3,625 $ 767
Less:stock-based compensation expense 1,197 918 22
--------- --------- ---------
Non-GAAP general and administrative $ 2,326 $ 2,707 $ 745
========= ========= =========
ENTROPIC COMMUNICATIONS, INC.
GAAP Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
March 31, Dec. 31,
2008 2007
--------- ---------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 16,545 $ 51,533
Marketable securities 18,586 2,965
Accounts receivable, net 37,852 24,489
Inventory 14,242 15,332
Prepaid expenses and other current assets 2,004 2,238
--------- ---------
Total current assets 89,229 96,557
Property and equipment, net 12,027 8,952
Intangible assets, net 32,309 34,145
Goodwill 86,256 86,256
Other long-term assets 389 416
--------- ---------
Total assets $220,210 $226,326
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses 19,053 18,909
Accrued payroll and benefits 4,314 4,253
Deferred revenues 303 303
Current portion of line of credit and
loans payable -- 2,860
Current portion of software licenses and
capital lease obligations 268 384
--------- ---------
Total current liabilities 23,938 26,709
Stock repurchase liability 1,591 1,765
Lines of credit and loans payable -- 5,547
Other long-term liabilities 3,061 1,907
Commitments and contingencies
Stockholders' equity 191,620 190,398
--------- ---------
Total liabilities and stockholders' equity $220,210 $226,326
========= =========